HelloMD CEO Discusses Cannabis-Orientated Digital Medical Platform

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

HelloMD is a cannabis-orientated health and wellness digital medical platform that connects patients with medical professionals. Founder and CEO Mark Hadfield discusses how his platform has a cost and convenience advantage; HelloMD services are online and this private and secure interaction helps more reticent patients overcome the stigma associated with cannabis. HelloMD also works with licensed producers to make cannabis products available to consumers; the medical platform offers a full e-commerce experience to its California customers, including one-hour deliver. HelloMD is one of the few digital medical platforms that has scaled across states and countries, and is now available to Canadian patients. In additional to its revenue streams which include product sales and delivery, HelloMD also produces cannabis health content in the form of videos, interviews, and posts, which assists in patient referrals.

Transcript:

James West:   Hey, welcome now. My guest joining me from San Francisco via Skype is Mark Hadfield, CEO of HelloMD. Mark, welcome.

Mark Hadfield: Thank you, James. Thank you for having me.

James West:   Sure, you bet. Mark, let’s start with an overview: what is the business of HelloMD?

Mark Hadfield: Sure. Well, HelloMD was founded about four years ago in California by myself, with a focus on health and wellness cannabis consumers. Our initial service was a tie service where we connect patients and doctors over video link, much like this Skype link.   And but then over the four years we evolved into a full demand-side platform, so what we do is, we seek to answer all the questions that cannabis consumers have. You know, which includes beginning with consultation with a doctor or medical professional, but then product advice, advice on all sort of things. It’s just a confusing landscape for many new consumers to come into, so the company has involved into a B2B and a B2C demand-side platform, and we have about 100,000 patients that we’ve connected with doctors, and we have a growing community of about 250,000 people on the platform.

James West:   Okay, so are those patients currently all in the US?

Mark Hadfield: Well, actually, over the four years we’ve also expanded the territory. So we started in California, we opened in Canada recently with B2B offerings, and then we’ve expanded our service offering to include e-commerce cannabis sales and delivery to California. And then nationwide CBD sales throughout all 50 states in America, which we obviously see as a massive, growing market.

James West:   I see. So is –

Mark Hadfield: So we’re one of the few tech platforms that has scaled across borders, state borders and national borders, and because we don’t touch the plant, of course we’re able to do that. So that’s something a lot of cannabis companies struggle with, is geographic scale.

James West:   Okay. So is your focus exclusively cannabis oriented?

Mark Hadfield: Well, it’s health and wellness. I mean, we think that cannabis is part of the health and wellness industry, and ultimately will be absorbed back into the health and wellness industry; but we have a cannabis-specific focus. So you know, people come to us primarily because they have depression, they have insomnia, they have stress, they have PTSD, they have migraines, they have chronic pain, and we think that’s the biggest part of the market. Hundreds of millions of people have those conditions, and so it’s really a health and wellness focused platform with a strong cannabis orientation.

James West:   Interesting. And so, how do you make money, if you don’t mind my asking?

Mark Hadfield: Well, we make money different ways in different territories. So in Canada it’s a B2B offering today, where we do white label cannabis telehealth, or for LPs and for other big companies; in California we make money through B2C telehealth, as well as cannabis e-commerce sales and delivery. And then CBD sales through mail order as well. So it depends on the territory, but we think over time, each territory continues to liberalize, and we intend to offer a full suite of demand-side services to consumers where we can.

We’re also looking in Europe, of course; United Kingdom and Germany. So it’s definitely a worldwide focus, but each territory has to catch up with cannabis legalization before we can deliver the full set of services.

James West:   I see. And so, do you work in partnership with licensed producers to recommend their products, or do you have an agnostic approach to which product supplier your patients end up using? How does that work?

Mark Hadfield: Yeah, so it’s essentially up to the consumer, but of course we work with many of the licensed producers, so you know, we document their products. We have feedback on their products in terms of reviews on medical efficacy, and then when the consumer comes in, they’re connected with a health care practitioner, and then we also guide them through their choices as to which products might be more suitable for them. And of course, which LP they may want to connect with. We work with a number of LPs; not all of them, but we work with a number of LPs to make their products available to consumers.

James West:   And so what is the biggest sort of driver that brings a customer to your platform?

Mark Hadfield: Well it’s simply cost and convenience. You know, it’s online, purely online, and you know, despite the fact that cannabis is becoming de-stigmatized, a lot of people still feel a little awkward about it. And so the ability to connect privately from their home, from their office, to not have to go and sit and wait in a clinic, to not have to go and visit a dispensary, those are very powerful factors, particularly for the consumer that we are targeting, which is the health and wellness consumer that’s not recreationally focused. Maybe they’ve never tried cannabis before; maybe they tried it in college, but now they’re getting a bit older and they have medical issues that they’re trying to solve for.

And so it’s really the cost and the convenience and the privacy of being able to do it completely remotely, completely over video, as well as getting quality medical advice and information.

James West:   Interesting. Do you expect that global de-prohibition in the United States will be a large boost to your business?

Mark Hadfield: Yeah, absolutely. I mean, it’s been fascinating to watch what is happening in Canada, because in many ways, Canada is behind the United States in terms of product innovation; but on the other hand, because of the deregulation in Canada, or the legalization in Canada, it’s opened the doors to public markets, to more traditional, more conservative companies wanting to enter the market, and so we think the United States will go exactly the same way.

You know, right now we have this thing called the States Bill, which is slowly making its way into Congress, and that potentially is going to open the doors to all of these things, investment, public markets, the entry of big companies into the industry itself. And so we think that, you know, Canada is a bellwether of what’s going to happen in the United States, and the United States will get there eventually in a big way, most likely.

James West:   Okay. Well, so then, if I was wanting to, you know, decide whether cannabis was right for me, how would I come across you without having heard about you before?

Mark Hadfield: Well, it’s a B2B and B2C, so we produce a lot of content, we have a lot of organic search; that’s the one channel that you might come across us through, is just by searching on cannabis and any health condition and coming across a piece of content. It could be a video or a written article that we’ve put out, or an interview with some expert. And so about 50 percent of our customers come to us through organic search.

The other 50 percent come in through the partner channels. So we have white label offerings for LPs and brands as well; basically, anybody who’s looking to educate cannabis consumers in advance of a purchase of their product, can deploy some of our technology on their website and deliver a discreet doctor’s consultation to that patient, and then have them returned back to that website for their shopping experience. So it’s about 50/50 between those two channels, is how we acquire customers.

James West:   I see. I see that you actually have some of the LPs’ products available on your website. Does that mean I can buy them directly through you, or are these just links to the actual companies’ websites?

Mark Hadfield: Yes, so in Canada that’s informational right now. So the LPs that we work with, we show their products, so we advise customers as to their product choices. Of course, to make the connection, they need to connect with the LP; that’s the state of legislation in Canada.

In California, it’s different; in California, we offer a similar product selection, but you can actually have the full e-commerce experience. So you can add to cart, you can pay and checkout, and then a driver will show up at your door within an hour or so with the products in a bag. That’s the California experience. So as I said, it depends on the territory.

James West:   Yeah.

Mark Hadfield: It depends on the territory, but ultimately we’re going to get there in Canada as well, depending on how things go.

James West:   So as a medical sort of oriented organization, do you think that the California approach that makes access to cannabis really easy for anybody, do you think that constitutes a bit of a risk to certain segments of society relative to the Canadian model, where it’s very difficult and very controlled to get access to cannabis?

Mark Hadfield: You know, I don’t look at it as a risk. I mean, cannabis is everywhere; it’s always been everywhere on the black market. And so really, the way I look at this is, it’s more a question of giving consumers the right advice and information, and letting them make an informed choice. You can’t keep it away from them; they can always get hold of it. They can get it from someone down the road, they can get product that hasn’t been tested, they can, you know, they can not have the right information and medical advice. So that’s not the right channel.

I think also, if you look at the market, you know, there’ll be about 12 percent of consumers that are on the recreational side, but we think that there’s a much, much bigger sector that really has health and wellness concerns, and for those people, cannabis is a very, very strong alternative for things like opiates, for stress, for anxiety, and so, you know, you have to look at the alternatives of these. Instead of the threat, the question is, what is the alterative?

Of course, opioids are not a good alternative for chronic pain, so we feel that we’re helping people, and as I said, with a strong health and wellness focus, quality medical advice, doctors that have been trained in cannabis, we think we’re performing a very valuable service as well as the discretion and the convenience of it.

James West:   Right. That’s great, Mark. Okay, we’ll leave it there for now. I’ll come back to you in due course and have another conversation. Thank you very much for joining us today.

Mark Hadfield: You’re welcome, James. Thank you very much for having me.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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